Proved reserves grew 1.5 MMBoe to 44.7 MMBoe for the year ending
December 31, 2016

Production of 6,181 Boepd at the approximate midpoint of
guidance for the year ending December 31, 2016 despite 175 Boepd of
asset sales during 2016

Capital expenditures of $31.7 million 9% below revised guidance

All operations on track with original schedule

December 31, 2016 Reserves

As of December 31, 2016, Abraxas’ proved oil and natural gas reserves
consisted of approximately 44.7 MMBoe, a net increase of 1.5 MMBoe over
2015 year end reserves of 43.2 MMBoe. December 31, 2016 reserves
consisted of approximately 24.2 million barrels of oil, 8.6 million
barrels of NGLs and 70.8 billion cubic feet of natural gas. Proved
developed producing reserves were 13.9 MMBoe and comprised 31% of proved
reserves as of December 31, 2016. The SEC-priced pre-tax PV-10(1)
(a non-GAAP financial measure) was $160.6 million, using 2016 average
prices of $42.74/bbl of oil and $2.50/mcf of natural gas. Realized
pricing, including differentials, used in this calculation equated to
$35.54/bbl of oil and $1.41/mcf of natural gas.

The majority of the reserve additions came from the Williston Basin,
where Abraxas benefited from an upward revision in the Company’s Middle
Bakken type curve to 832 MBoe from 530 MBoe at December 31, 2015 (853
MBoe at strip pricing which extends the economic life of the well).
Abraxas also benefited from an upward revision in the Company’s first
bench Three Forks type curve to 709 MBoe from 530 MBoe at December 31,
2015 (726 MBoe at strip pricing which extends the economic life of the
well). In Ward County, Abraxas also added 5 gross (1.8 net) locations of
proved undeveloped reserves on the Company’s Caprito lease in the
Wolfcamp A2 zone at 571 MBoe (588 MBoe at strip pricing which extends
the economic life of the well). Abraxas also sold 1.2 MBoe of reserves
during 2016.

The independent reserve engineering firm DeGolyer and MacNaughton
prepared a complete engineering analysis on 98% of Abraxas’ proved
reserves on a Boe basis.

The following table outlines changes in Abraxas’ proved reserves from
December 31, 2015:

Oil

(MMbbl)

Natural Gas

(Bcf)

NGL

(MMbbl)

Total

(MMBoe)

Proved Reserves December 31, 2015

24.1

75.0

6.6

43.2

Additions

1.2

1.2

0.2

1.5

Purchases

—

—

—

—

Revisions

1.4

(1.6

)

2.3

3.4

Sales

(1.1

)

(0.7

)

(0.1

)

(1.2

)

Production

(1.4

)

(3.1

)

(0.4

)

(2.2

)

Proved Reserves December 31, 2016

24.2

70.8

8.6

44.7

Fourth Quarter and Year End 2016 Production and
CAPEX Update

Production for the fourth quarter of 2016 is expected to average
approximately 7,955 Boepd (4,923 barrels of oil per day, 10,087 mcf of
natural gas per day, 1,350 barrels of NGL per day). Abraxas volumes were
partially impacted by freeze offs in the Bakken and Permian in December
2016. During 2016, Abraxas also successfully closed two asset sales with
approximately 175 Boepd of associated production and effective dates of
June 1 and October 1, 2016. Despite the curtailments and asset sales,
production for the year ending December 31, 2016 averaged approximately
6,181 Boepd (3,750 barrels of oil per day, 8,633 mcf of natural gas per
day, 993 barrels of NGL per day) or the approximate midpoint of Abraxas’
guidance of 6,200 Boepd.

Capital expenditures for the year ended December 31, 2016 are expected
to be approximately $31.7 million or approximately 9% below the
Company’s revised $35 million budget.

Delaware Basin

In Ward County, Texas, Abraxas recently spud a two well pad in the
Caprito 98-201H and Caprito 98-301H in February, 2017. The Caprito
98-301H will target the Wolfcamp A2 zone, which Abraxas targeted in the
Caprito 99-101H (renamed to the Caprito 99-302H). The Caprito 98-201H
will target an additional prospective zone in the Wolfcamp A1. Abraxas
estimates it will own a working interest of approximately 88% in the
Caprito 98-201H and 98-301H, respectively.

Williston Basin

At Abraxas’ North Fork prospect, in McKenzie County, North Dakota, the
Company completed the intermediate sections of the Stenehjem 6H-9H and
the lateral of the Stenehjem 9H. Abraxas is currently drilling the
lateral of the Stenehjem 8H. Abraxas working interest in the Stenehjem
6H-9H is approximately 75%.

Eagle Ford/Austin Chalk

In Atascosa County, Texas, Abraxas plans to spud an Eagle Ford test in
April 2017 on the Company’s Red Eye Unit. Although Abraxas remains
encouraged by the Austin Chalk, the Company believes enhanced completion
techniques (specifically the use of diverters) could significantly
improve the economic viability when applied to the Eagle Ford formation.
Testing the Eagle Ford will have the added benefit of holding acreage
through the entire lower Eagle Ford and maintaining the Austin Chalk
rights. Abraxas will have a 100% working interest in the Red Eye 1H.

Bob Watson, President and CEO of Abraxas, commented, “We are pleased to
report our fifth consecutive year of significant production and reserve
growth. Obviously, 2016 was a transformational year as our change in
Bakken completion design led to a significant increase in our Bakken
type curve and our first Wolfcamp completion opened up a multi-year
low-risk development for Abraxas. Although the last two weeks of 2016
were plagued by downtime caused by freeze-offs, we are pleased that our
annual production guidance still came in at the middle of the range. On
the positive front, our gas volumes in the Permian, which were curtailed
for almost a year and a half, have been producing at full rates since
mid-January. We expect this to continue as a result of our third party
processer making substantial upgrades to their facility.

“We are embarking on a more aggressive development campaign in 2017 to
capitalize on our 2016 success. By the end of the second quarter of 2017
we should have four operated Bakken wells, two operated Permian wells
and one operated Eagle Ford well on production or set for completion.
This will lead to a significant increase in our daily volumes. With a
pristine balance sheet with over $95 million of liquidity, a solid
hedging profile and a multi-year inventory of highly economic
development wells ahead of us in the Bakken and Wolfcamp, we are well
positioned to drive multiple-years of exceptional growth and returns for
our shareholders.”

(1)The following table provides a reconciliation of PV-10 to
the standardized measure of discounted future net cash flows at December
31, 2015 and 2016:

December 31,

(in thousands)

2015

2016

PV-10

$

197,251

$

160,600

Present value of future income taxes discounted at 10%

—

—

Standardized measure of discounted future net cash flows

$

197,251

$

160,600

Abraxas Petroleum Corporation is a San Antonio based crude oil and
natural gas exploration and production company with operations across
the Rocky Mountain, Permian Basin and South Texas regions of the United
States.

Safe Harbor for forward-looking statements: Statements in this release
looking forward in time involve known and unknown risks and
uncertainties, which may cause Abraxas’ actual results in future periods
to be materially different from any future performance suggested in this
release. Such factors may include, but may not be necessarily limited
to, changes in the prices received by Abraxas for crude oil and natural
gas. In addition, Abraxas’ future crude oil and natural gas production
is highly dependent upon Abraxas’ level of success in acquiring or
finding additional reserves. Further, Abraxas operates in an industry
sector where the value of securities is highly volatile and may be
influenced by economic and other factors beyond Abraxas’ control. In the
context of forward-looking information provided for in this release,
reference is made to the discussion of risk factors detailed in Abraxas’
filings with the Securities and Exchange Commission during the past 12
months.